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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2003.

OR

For the transition period from              to             .

Commission file number: 0-21643

CV THERAPEUTICS, INC.

(Exact name of Registrant as specified in its charter)

3172 Porter Drive, Palo Alto, California 94304

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (650) 384-8500

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 Par Value

Indicate by check whether the Registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  x    No  ¨

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, was $841,166,744 as of June 30, 2003.

The number of shares of Common Stock outstanding as of March 4, 2004 was 31,480,015.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant’s Definitive Proxy Statement in connection with the Registrant’s 2004 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this report.

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CV THERAPEUTICS, INC.

FORM 10-K

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PART I

Overview

CV Therapeutics, Inc., headquartered in Palo Alto, California, is a biopharmaceutical company focused on the discovery, development and commercialization of new small molecule drugs for the treatment of cardiovascular diseases. The Company, a pioneer in a new biomedical discipline called molecular cardiology, applies advances in molecular biology and genetics to identify new mechanisms of cardiovascular diseases and new targets for drug discovery.

Building on the experience and expertise of our scientific staff, we use molecular cardiology to focus our research and development efforts on molecular targets that can be identified as directly linked to potentially relevant physiological and clinical criteria such as alterations in blood pressure, heart rate or cardiac output that produce disease symptoms. We are building a pipeline of novel small molecule product candidates that are designed to offer improved efficacy or reduced side effects compared to existing therapies.

We are developing our lead drug candidate Ranexa^TM (ranolazine) for the potential treatment of chronic angina. Unlike current anti-anginal drug therapies, Ranexa appears to exert its anti-anginal activity without depending on reductions in heart rate or blood pressure. In December 2002, we submitted a New Drug Application (NDA) for Ranexa to the United States Food and Drug Administration (FDA). On October 30, 2003, the FDA sent us an approvable letter indicating that Ranexa is approvable, that there is evidence that Ranexa is an effective anti-anginal, and that additional clinical information is needed prior to approval. On December 9, 2003, the Cardiovascular and Renal Drugs Advisory Committee of the FDA discussed a range of issues relating to the review of Ranexa but did not vote on any matters presented to it. Based on verbal discussions with the FDA since that time, we anticipate that we can receive from the FDA initial marketing approval of Ranexa with the successful completion of a single study. We are still in discussions with the FDA about the exact details of this study, which will be in a restricted population of angina patients, and which we believe can be conducted following an agreement with the FDA under a special protocol assessment (SPA). We believe that the number of patients to be enrolled in the trial will be between the number of patients enrolled in our two prior Phase III studies of Ranexa, and that enrollment could be completed in 2005, which could allow for a potential launch of Ranexa in 2006 in the United States. If approved by the FDA, Ranexa would represent the first new class of anti-anginal therapy in the United States in more than 25 years.

We are also developing regadenoson, an A_2A-adenosine receptor agonist, for potential use as a pharmacologic agent in cardiac perfusion imaging studies, and tecadenoson, an A₁-adenosine receptor agonist, is being developed for the potential reduction of rapid heart rate during atrial arrhythmias. Adentri^TM, an A₁-adenosine receptor antagonist for the potential treatment of acute and chronic congestive heart failure (CHF), is licensed to Biogen, Inc. (now Biogen Idec Inc.). In addition, we have several research and preclinical development programs designed to bring additional drug candidates into human clinical testing.

Cardiovascular Disease Background

Despite the development during the past 25 years of significant new therapies for patients with cardiovascular disease, heart disease remains the leading cause of death in the United States, claiming almost 1,000,000 lives in 2001. Molecular cardiology is providing new insight into the mechanisms underlying cardiovascular diseases, thus creating the opportunity for improved therapies.

The cardiovascular system is comprised of the heart, the blood vessels, the kidneys and the lungs. Together, the components of the cardiovascular system deliver oxygen and other nutrients to the tissues of the body and remove waste products. The heart propels blood through a network of arteries and veins. The kidneys closely

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regulate the volume of blood in the body and the balance of chemicals in the blood, such as sodium, potassium and chloride. The lungs put oxygen in the blood and remove carbon dioxide. To accomplish these tasks, the cardiovascular system must maintain adequate blood flow, or cardiac output. Cardiac output is determined by factors such as heart rate and blood pressure, which in turn are controlled by a variety of hormones such as adrenaline, angiotensin and adenosine. Any significant disruption of this system results in cardiovascular disease.

Cardiovascular diseases, including atherosclerosis (hardening of the arteries), hypertension (high blood pressure), ischemia (imbalance between oxygen demand and oxygen supply in the heart), and others, may cause permanent damage to the heart and blood vessels, leading to CHF, angina and myocardial infarction (heart attack). According to the Heart Disease and Stroke Statistics—2004 Update published by the American Heart Association (AHA), in the United States in 2003, there were 6.8 million patients with angina and 5.0 million patients with CHF. In 2000, there were 2.8 million hospital diagnoses of acute atrial arrhythmias in the United States. More than 20 years ago, drugs such as nitrates, beta-blockers, calcium channel blockers and angiotensin converting enzyme (ACE) inhibitors were developed to treat cardiovascular diseases. These drugs have contributed to an increase in the survival of patients who suffer from cardiovascular disease. However, these drugs also can cause a variety of undesirable side effects, including fatigue, depression, impotence, headaches, palpitations and edema (swelling). They may also be less effective in various groups of patients with cardiovascular disease.

Business Strategy

The key elements of our business strategy are as follows:

Identify and develop new drugs within a single therapeutic area—cardiovascular disease

By focusing on one therapeutic area, cardiovascular disease, we believe that we can be relatively efficient in our drug discovery, development and commercialization efforts. Our concentrated focus on cardiovascular disease enhances our efforts in the following areas:

Focus on small molecule drug candidates

Small molecule therapeutics can frequently be administered orally on an outpatient basis. By contrast, to date, “large molecule” therapeutics, such as proteins or monoclonal antibodies, can very rarely be formulated to accommodate oral outpatient administration. In addition, our emphasis on small molecule therapeutics means that our drug candidates can be produced by conventional pharmaceutical manufacturing methods, using the established production capabilities of the contract pharmaceutical manufacturing industry.

Commercialize products, in part, through a concentrated sales and marketing effort targeted to cardiologists

A focused commercialization effort can provide sales and marketing cost efficiencies. Patients that have severe cardiovascular conditions are often treated by cardiologists. In 2002, there were approximately 24,000

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cardiologists in the United States. Cardiologists are typically concentrated in metropolitan communities near major medical centers. We believe that this relatively small number of specialists is responsible for a significant portion of the patient visits associated with prescriptions written for important cardiovascular conditions such as angina. These market dynamics make it possible to market and sell our products with a focused commercialization effort.

Participate in the U.S. sales and marketing of at least some of the drugs we develop

In the biopharmaceutical industry, a substantial percentage of the profits generated from successful drug development are typically retained by the entity directly involved in the sales and marketing of the drug. Licensing our drug candidates to a third party who will complete development and provide sales and marketing resources in exchange for a sales royalty may reduce some of our risks. However, we believe that the risk-return tradeoff typically favors developing and then marketing and selling products ourselves. Therefore, a key element of our business strategy is to be involved, when practical, in the sales and marketing of our products in the United States. Though we may become involved in direct sales and marketing activities in other parts of the world, our initial direct efforts will be in the United States.

Product Portfolio

We have the following portfolio of product candidates:

In the table, under the heading “Development Status,” Approvable letter received indicates that the FDA has reviewed the NDA and has issued an approvable letter; Phase III indicates evaluation of clinical efficacy and safety within an expanded patient population at geographically dispersed clinical trial sites; Phase II indicates clinical safety testing, dosage testing and initial efficacy testing in healthy volunteers and/or a limited patient population; Phase I indicates initial clinical safety testing in healthy volunteers or a limited patient population, or studies directed toward understanding the mechanisms of the drug; Preclinical indicates lead compound selected for possible development based on predetermined criteria for toxicity, pharmacologic activity, potency,

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specificity and manufacturability; and Research indicates lead candidate being tested against predetermined criteria. For purposes of the table, “Development Status” indicates the most advanced stage of development that has been completed or is in process.

Ranexa (ranolazine)

Ranexa (ranolazine) is a novel small molecule for the potential treatment of chronic angina. Unlike current anti-anginal drug therapies, ranolazine appears to exert its anti-anginal activity without depending on reductions in heart rate or blood pressure. We are developing Ranexa for the potential treatment of chronic angina because we believe Ranexa is safe and effective in treating angina and may reduce the frequency of painful angina attacks and the use of nitroglycerin to relieve angina pain. In addition, unlike current anti-anginal medicines, Ranexa does not appear to produce clinically meaningful changes in blood pressure or heart rate, and as a result, Ranexa may provide significant benefits for some patients. We licensed exclusive rights to Ranexa in the United States and specified foreign territories for use in all cardiovascular indications, including chronic angina, from Syntex (U.S.A.) Inc. in March 1996.

Chronic Angina

Chronic angina is a serious and debilitating heart condition, usually associated with coronary artery disease (CAD) and marked by repeated and sometimes unpredictable attacks of chest pain. As a result, the condition can significantly compromise patients’ lifestyles. Patients often must limit their activities to avoid an attack.

Angina attacks occur when the heart does not receive sufficient oxygen to function effectively due to CAD, which is characterized by a buildup of fatty, cholesterol-containing plaques in coronary arteries. The accumulation of plaques in coronary arteries reduces the flow of oxygen-rich blood to the heart. When the blood supply to the heart is inadequate and cannot provide enough oxygen to meet the heart muscle’s demand (myocardial ischemia), an angina attack may occur. Risk factors for the development of CAD, ischemia and chronic angina include high cholesterol, smoking, high blood pressure, diabetes, age, gender and family history.

Triggers of an angina attack include physical activity, stressful or emotional situations, eating, smoking and cold temperatures. When attacks occur, patients experience a wide range of physical symptoms, which can vary from person to person and from attack to attack. Some patients experience mild symptoms such as feeling faint and/or nauseous or breaking out in a cold sweat. Some patients experience severe pain or chest pressure. Still other patients describe attacks as a vise-like crushing or squeezing sensation behind the breastbone or sternum, which also may radiate to the jaw, teeth, shoulders or back.

Chronic angina is a growing health problem, affecting millions of people, generally over the age of 55. Annually, it costs the United States tens of billions of dollars in healthcare services and lost work. According to the AHA’s Heart Disease and Stroke Statistics—2004 Update, 6.8 million people in the United States live with chronic angina, with an additional 400,000 people newly diagnosed each year. The U.S. Census Bureau projects that the over 55 population the group most at-risk for angina—will increase by approximately 70 percent over the next 30 years.

Current Pharmaceutical Approaches to Chronic Angina Treatment

Currently available drugs to treat chronic angina include beta-blockers, calcium channel blockers and long-acting nitrates. These drugs decrease the heart’s demand for oxygen by reducing the work it performs; this reduction in work is achieved by lowering heart rate, blood pressure and/or the strength of the heart’s contraction. These hemodynamic effects can limit or prevent the use of currently available drugs in patients whose blood pressure or cardiac function is already decreased. These limiting effects can be particularly pronounced when these drugs are used in combination.

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In addition, co-morbidities such as reactive airway disease, CHF and diabetes also complicate treatment with existing anti-anginal drugs because these conditions may cause patients to be more vulnerable to known side effects of currently approved therapies. For many chronic angina patients with these diseases, currently available therapies may provide incomplete relief.

Despite the use of currently available therapies, up to three-fourths of patients still have angina symptoms. Some patients on multiple drugs continue to experience, on average, two attacks per week. Adverse effects of drug therapy include lower extremity edema associated with calcium channel blockers, impotence and depression associated with beta-blockers, and headaches associated with nitrates. Consequently, for some patients and physicians, presently available medical treatment may not relieve angina without unacceptable effects.

Ranexa—A Potential New Approach Without Depending On Reductions In Heart Rate Or Blood Pressure

The treatment of angina is suboptimal in many angina patients because they cannot tolerate the currently available anti-anginal agents at doses sufficient to treat their symptoms fully, either because of their concomitant diseases, or because of the adverse effects intrinsic to the drugs themselves. We believe that a well tolerated anti-anginal drug, which provides efficacy either by itself or in addition to that provided by existing agents, without further reducing blood pressure, heart rate and/or contractile function, would be a useful new tool to alleviate the burden of chronic angina. Such a drug would provide physicians with an additional option to treat patients who are symptomatic with angina but cannot tolerate reductions in blood pressure, heart rate or contractile performance or the slowing of AV nodal conduction caused by existing anti-anginals.

Preclinical research indicates that Ranexa is a potent and selective late sodium current blocker whose effects include increased cardiac efficiency. Because of Ranexa’s action as a potent and selective late sodium current blocker, it is believed to prevent sodium overload and resulting calcium overload in the heart, which occur during both ischemia and heart failure but not in the normal heart. This in turn can preserve energy and mitochondrial function, restore contractility and diastolic function, and preserve proper ion balance. To our knowledge, Ranexa is the first potent and selective late sodium current blocker in cardiovascular development.

In our Phase III clinical trials of Ranexa, Ranexa did not produce clinically meaningful reductions in heart rate or blood pressure. Consequently, patients taking Ranexa may be able to maintain these hemodynamic measures at or near baseline levels.

Ranexa Development Status

Our Ranexa NDA seeking FDA approval for the treatment of chronic angina was submitted to the FDA in December 2002. The NDA contains data from more than 3,300 angina patients and subjects, and from over 25,000 electrocardiograms. Our two Phase III clinical trials of Ranexa, MARISA and CARISA, were randomized, double-blind, placebo controlled trials. MARISA evaluated Ranexa when used in patients who were not receiving other anti-anginal drugs (monotherapy). CARISA evaluated Ranexa when used in patients who were receiving either a beta-blocker or a calcium channel blocker. In both of these trials, Ranexa statistically significantly increased patients’ symptom-limited exercise duration at trough drug concentrations compared to placebo. This endpoint has historically been the primary efficacy endpoint for the evaluation of anti-anginal therapies that have been approved by the FDA. Additionally, in CARISA, Ranexa significantly reduced the frequency of angina attacks and the use of nitroglycerin to relieve angina pain. In both of these trials, Ranexa had no clinically meaningful impact on heart rate or blood pressure, either at rest or following exercise. In these trials, the most common adverse events included dizziness, constipation, nausea, asthenia (weakness), headaches and dyspepsia (indigestion). Adverse event frequency increased as dose increased. In addition, small but statistically significant increases in QTc, an electrocardiographic measurement, were observed compared to placebo.

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On October 30, 2003 we received an approvable letter from the FDA for our NDA for Ranexa for the treatment of chronic angina. In the approvable letter, the FDA indicated that Ranexa is approvable, that there is evidence that Ranexa is an effective anti-anginal, and that additional clinical information is needed prior to approval. On December 9, 2003 the FDA’s Cardiovascular and Renal Drugs Advisory Committee discussed a range of issues relating to the review of Ranexa for the treatment of chronic angina, but did not vote on any matters presented to it. Based on verbal discussions with the FDA since that time, we anticipate that we can receive from the FDA initial marketing approval of Ranexa with the successful completion of a single study. We are still in discussions with the FDA about the exact details of this study, which will be in a restricted population of angina patients, and which we believe can be conducted, following an agreement with the FDA, under a special protocol assessment (SPA). We believe that the number of patients to be enrolled in the trial will be between the number of patients enrolled in our two prior Phase III studies of Ranexa, and that enrollment could be completed in 2005, which could allow for a potential launch of Ranexa in 2006 in the United States. If approved by the FDA, Ranexa would represent the first new class of anti-anginal therapy in the United States in more than 25 years.

An agreement between a sponsor company and the FDA under an SPA for a Phase III clinical trial covers, among other things, the design and size of the trial that will form the basis of a claim of effectiveness, and the anticipated regulatory outcome (such as approval), assuming that the trial results are positive. The SPA agreement may only be changed by the sponsor company or the FDA through a written agreement, or if the FDA becomes aware of a substantial scientific issue essential to product efficacy or safety. If the sponsor company fails to comply with the agreed upon trial protocol, the SPA will not be binding on the FDA.

We also plan to conduct one or more additional clinical trials of Ranexa, which could potentially allow us to broaden the product labeling, if any, over time. For example, we are considering conducting a study with the TIMI study group in ischemic patients with acute coronary syndromes (ACS) and angina. Patients would be started on intravenous ranolazine in the hospital followed by outpatient treatment with oral ranolazine. If successful, this study could potentially support subsequent FDA approval of Ranexa as a first line therapy for angina patients, and could allow us to access the hospital market for ACS patients.

Information relating to these potential additional Ranexa studies, including the proposed study in a restricted population of angina patients and the potential SPA, the TIMI study and any additional studies of Ranexa, is based on verbal discussions between us and the FDA, is not yet definitive, and is subject to change based on our continuing discussions with and submissions to the FDA.

We are working on a submission of a centralized marketing authorization application for ranolazine for potential use in patients with chronic angina in Europe. We have opened a small office in the United Kingdom, which has as its primary function the evaluation of the clinical, regulatory and marketing issues for our product candidates in Europe.

While we believe that the safety and efficacy of Ranexa have been well characterized as part of our clinical development program, the final determination of the safety and efficacy of Ranexa will be made by the FDA and other relevant health authorities. Ranexa has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Potential Commercialization of Ranexa

In July 2003, we modified our Ranexa commercialization agreement with Quintiles Transnational Corp., which was originally signed in May 1999. The modified agreement provides us with complete commercialization rights for Ranexa, including the right to hire and train a dedicated cardiovascular sales force. Quintiles and its commercial sales and marketing subsidiary, Innovex Inc., continue to have a commercialization services relationship relating to Ranexa and also are preferred providers of their full range of pharmaceutical services to us. Under this modified agreement, Quintiles received a warrant for 200,000 shares of our common stock. These

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modifications supercede the terms of the original agreement, which included payments from us to Innovex of a fee based on a percentage of sales in the first five years of Ranexa sales, and a royalty in the sixth and seventh year.

Since the modification of the agreement, we have increased our efforts to build our internal commercialization infrastructure. We have also developed senior sales and marketing team to plan and manage a future field sales organization for Ranexa, if approved, and other potential products.

Regadenoson

We are developing regadenoson (CVT-3146) for potential use as a pharmacologic stress agent in cardiac perfusion imaging studies (stress tests). Cardiac perfusion imaging studies offer physicians a non-invasive tool to identify areas of poor blood flow to the heart muscle, which may be caused by coronary blockages. Some of these studies identify areas of limited blood flow by administering pharmacologic agents that increase blood flow in normal coronary arteries much more than in diseased arteries. Regadenoson is an A_2A-adenosine receptor agonist, which may act selectively on the heart to cause coronary vasodilation and thus increase coronary blood flow. Therefore, regadenoson may provide doctors with an alternative pharmacologic agent for cardiac perfusion imaging studies that may have fewer unwanted side effects. We have entered into a collaboration with Fujisawa Healthcare, Inc. to develop and market regadenoson in North America. We are currently conducting a Phase III clinical trial of regadenoson in patients undergoing a cardiac stress test.

Cardiac Perfusion Imaging Studies

During cardiac perfusion imaging studies, two sets of images of the heart are obtained, one following exercise, the other at rest. Patients begin the procedure by exercising on a treadmill. When they reach their maximum level of exercise, a small amount of a radioactive tracer (radiotracer) is injected into the bloodstream. The radiotracer mixes with the blood and is taken up by the heart muscle cells. The patient then lies under a camera that can visualize the radiotracer and produce images of the areas of the heart where the radiotracer has been taken up. Separate images are taken at rest.

By comparing images taken during exercise (stress) to images taken at rest, physicians can identify areas of the heart with insufficient blood flow, indicating potentially narrowed or blocked coronary arteries requiring further medical attention. For example, if the test shows a normal image at rest but not at exercise, the heart is ischemic during stress because it is not getting enough blood when it must work harder.

In cases where the patient cannot exercise on the treadmill, the patient will typically receive a pharmacologic agent that simulates the conditions of the treadmill exercise test on the heart. In 2002, approximately 7.8 million patients underwent cardiac perfusion imaging studies. Of those, approximately 3.4 million, or more than 40%, required a pharmacologic agent to generate maximum coronary blood flow because peripheral vascular disease, arthritis or other limiting medical conditions prevent them from exercising on the treadmill.

Current Approaches to Increasing Coronary Blood Flow During Cardiac Imaging Studies

Current pharmacologic agents used in cardiac imaging testing include dipyridamole and Adenoscan^®, the brand name for adenosine. These agents are administered to patients intravenously with an infusion pump. Adenoscan^® is the naturally occurring agent that causes coronary vasodilation and has a short half-life. However, because Adenoscan^® activates all four adenosine receptor subtypes, it can cause unwanted side effects including flushing, dyspnea and headache, and it should not be used in asthma patients. Another current cardiac imaging agent, dipyridamole, acts by increasing adenosine levels and has a longer half-life. Patients must be closely monitored after administration of dipyridamole, and the most prevalent side effects include chest pain, headache and dizziness in patients.

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Potential Treatment by Regadenoson

Regadenoson is a selective A_2A-adenosine receptor agonist, which is designed to act on the coronary arteries to cause coronary vasodilation and thereby increase coronary blood flow. By selective stimulation of the A_2A-adenosine receptor, regadenoson may avoid unwanted side effects such as reduced heart rate, heart block and bronchoconstriction, which may occur when other adenosine receptor sub-types are stimulated. Regadenoson may dilate coronary arteries at doses which do not dilate other arteries, thereby possibly avoiding major and sustained decreases in blood pressure (hypotension). Since regadenoson can be administered as a bolus, an infusion pump may not be needed. This potentially could make it easier and faster for health care providers to administer the pharmacologic agent and perform the imaging test.

Regadenoson Development Status

In November 2002, at the annual meeting of the American Heart Association, we announced results from a Phase II trial in which regadenoson produced a dose-dependent increase in coronary blood flow velocity. This open-label study was designed to evaluate the effect of a single rapid intravenous bolus of regadenoson on coronary blood flow velocity at various doses. At all doses studied, regadenoson caused a rapid increase in coronary blood flow velocity that was at or near peak within 30-40 seconds. The study also identified doses of intravenous regadenoson that caused a maximal response that was similar to that caused by intracoronary adenosine. In this trial, regadenoson was generally well-tolerated, and drug-related adverse events, including chest discomfort, increased heart rate, hypotension, flushing and shortness of breath, were mild and self-limited. In this trial, regadenoson achieved our target profile of coronary blood flow increase for a potential pharmacologic stress agent.

In November 2003, at the annual meeting of the American Heart Association, we announced results from a Phase II trial in which regadenoson provided a similar ability to detect and quantify myocardial ischemia with cardiac perfusion imaging studies as noted with an adenosine infusion. This study was designed to determine the ability of regadenoson to produce an increase in coronary blood flow and accurately detect CAD. Subjects underwent both adenosine and regadenoson stress/rest cardiac perfusion imaging studies. The stress tests results following stress were similar both with visual and quantitative methods of analysis. The direct comparison also revealed no differences in ischemia detection. No dose-dependent effect of regadenoson on ischemia detection was noted.

In October 2003, we initiated a pivotal Phase III trial of regadenoson. This on-going study is a double-blind trial of regadenoson in patients undergoing a cardiac stress test. We anticipate initiating a second Phase III clinical trial of regadenoson in 2004.

Regadenoson has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Tecadenoson

We are developing tecadenoson (CVT-510) for the potential reduction of rapid heart rate during acute atrial arrhythmias. Atrial arrhythmias are abnormally rapid heart rates, and include the conditions of atrial fibrillation, atrial flutter and paroxysmal supraventricular tachycardias (PSVT). Tecadenoson is an A₁-adenosine receptor agonist, which may act selectively on the conduction system of the heart to slow electrical impulses. Tecadenoson may offer a new approach to rapid and sustained control of acute atrial arrhythmias by reducing heart rate without lowering blood pressure. We have completed a Phase III trial of tecadenoson in patients with PSVT and have completed Phase II trials in patients with atrial fibrillation and atrial flutter. Our current efforts in this program are aimed at identifying an appropriate potential commercial dosing regimen for future study of tecadenoson in patients with atrial fibrillation and atrial flutter.

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Acute Atrial Arrhythmias

Atrial arrhythmias occur when the atria of the heart beat rapidly, or uncontrollably, sending multiple electrical impulses to the ventricles of the heart. An excessive increase in ventricular rate reduces the heart’s cardiac output due to inadequate filling and emptying of the left ventricle. Potentially damaging consequences include low blood pressure and damage to the brain, heart and other vital organs; therefore, these rhythm disturbances often require immediate treatment. Prompt slowing of the heart rate is the goal of acute therapy. Because of the need to treat patients quickly, intravenous therapies allow for rapid stabilization of the patient while the underlying condition is diagnosed and treated.

Each year more than 2.8 million U.S. hospital admissions occur with patients who report symptoms such as palpitations, chest pain and/or shortness of breath caused by an atrial arrhythmia. Atrial arrhythmias can occur spontaneously or can arise following heart attacks, heart failure, cardiac surgery or other procedures that require opening the chest.

Cardiac Conduction System

During an atrial arrhythmia, the atria of the heart beat too rapidly, sending excessive electrical impulses to the ventricles of the heart. The electrical impulses, which initiate in the atria, reach the ventricles by passing through another set of specialized cells known as the atrio-ventricular (AV) node. The AV node controls the rate of transmission of the electrical impulses to the ventricles. Since the rate at which electrical impulses pass through the AV node determines ventricular heart rate, slowing AV nodal transmission will result in a reduction in the ventricular heart rate. Since ventricular heart rate is a primary determinant of cardiac output, prompt slowing of rapid AV nodal conduction is one treatment approach to slowing the abnormally rapid heart rate of atrial arrhythmias.

Current Approaches to Acute Heart Rate Control During Atrial Arrhythmias

Current medical therapies for acute atrial arrhythmias, which include digoxin, calcium channel blockers, beta-blockers and Adenocard^®, aim to slow the heart to a normal rate, but have significant limitations in the acute care setting. Digoxin is effective in controlling heart rate, but requires time to take effect. This is a significant negative feature in patients whose condition requires prompt heart rate control to restore normal cardiac output. Calcium channel blockers, beta-blockers and Adenocard^® act quickly but reduce blood pressure and depress cardiac function. As a result, these drugs could potentially exacerbate the condition of patients already experiencing cardiac dysfunction as a complication of the arrhythmia. Furthermore, the effect of Adenocard^® lasts only for a few seconds, so this product is approved for conversion of PSVT to normal sinus rhythm but is not approved for treatment in patients with atrial fibrillation or flutter.

Potential Treatment by Tecadenoson

Tecadenoson is designed to selectively stimulate the A₁-adenosine receptor. Stimulation of the A₁-adenosine receptor in the AV node slows the speed of electrical conduction across the AV node, which in turn reduces the number of electrical impulses that reach the ventricle. Stimulation of the A₂-adenosine receptor may lower blood pressure. Since tecadenoson is designed to selectively stimulate the A₁-adenosine receptor without significantly stimulating the A₂-adenosine receptor, it may be possible to use tecadenoson to intervene quickly in the arrhythmia process without unwanted blood pressure reductions. Tecadenoson may offer cardiac patients and clinicians an alternative to current therapies that are either relatively slow to act or that reduce blood pressure.

Tecadenoson Development Status

In November 2002, at the Late Breaking Clinical Trial Sessions of the American Heart Association Scientific Sessions, we announced results from TEMPEST (Trial to Evaluate the Management of PSVT during

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Electrophysiologic Study with Tecadenoson). In this Phase III trial, all five dosing regimens of tecadenoson converted patients with PSVT back into a normal heart rhythm (p<0.0005 vs. placebo). The most frequent adverse symptom was paresthesia, a tingly sensation. Other less frequent adverse symptoms included flushing, tachycardia, headache and dyspnea. There was no apparent dose-dependent increase in any adverse symptom following administration of tecadenoson. As expected, based on the pharmacology of the study drug, dose-dependent, transient and clinically insignificant AV block was observed shortly after conversion across the highest three doses of tecadenoson. Hemodynamic parameters such as blood pressure and heart rate were not adversely affected by tecadenoson.

In an earlier open-label, dose ranging Phase II clinical trial in patients with atrial fibrillation or flutter, tecadenoson appeared to reduce heart rate from baseline without clinically meaningful changes in blood pressure. Our current efforts in this program are aimed at identifying an appropriate potential commercial dosing regimen for future study of tecadenoson in individuals with atrial fibrillation and atrial flutter.

Tecadenoson has not been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Adentri Program

Patients with CHF have limited heart pumping function, and the corresponding reduction in blood flow impairs the kidneys’ ability to clear fluid wastes from the body. Current therapies for CHF tend to negatively impact other activities of the kidneys. Preclinical and clinical trials indicate that A₁-adenosine receptor antagonists may increase the kidneys’ ability to clear fluid wastes without decreasing other functions of the kidneys. Thus, we believe that A₁-adenosine receptor antagonists have the potential to be a new therapy for the treatment of CHF.

In March 1997, we licensed the rights to our A₁-adenosine receptor antagonist technology, patents and compounds (including CVT-124) to Biogen, Inc. (now Biogen Idec Inc.). Biogen’s efforts in this area are referred to as the Adentri program. As a result of the agreements we signed, Biogen has an exclusive worldwide license to develop, manufacture and commercialize any A₁-adenosine receptor antagonists developed either by Biogen or us based on our patents or our technology. Under the license, Biogen is responsible for funding all development and commercialization expenses related to the Adentri program.

Congestive Heart Failure

CHF occurs when the heart muscle is weakened by disease and cannot adequately pump blood throughout the body. As a result, fluid accumulates throughout the body, including in the lungs, causing shortness of breath. Fluid also accumulates in the body because of adaptations by the kidneys during CHF.

According to the AHA’s Heart Disease and Stroke Statistics – 2004 Update, approximately 5.0 million people in the United States suffered from CHF and an estimated 550,000 new cases arise each year. Almost one million patients in 2001 were hospitalized in the United States with a primary diagnosis of CHF.

Current Approaches to Treating Congestive Heart Failure

Many current treatments for CHF are designed to improve the pumping function of the heart, and involve the administration of diuretics to eliminate excess sodium and water from the body by blocking reabsorption in the kidneys. However, approximately one quarter of hospitalized CHF patients eventually become resistant to current intravenous diuretic therapies such as furosemide, thiazides and spironolactone. The dosage of the most commonly prescribed diuretics for CHF are often increased as the disease progresses. One potential side effect of such dosage increases is potassium loss, which may lead to an increased incidence of cardiac arrhythmias if potassium is not monitored and replaced. A decline in kidney function may also result. Furosemide, which is

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currently the most commonly used treatment for fluid overload caused by CHF, has been shown in prior trials to be associated with a reduction in the filtration function of the kidneys.

Potential Treatment by A₁-Adenosine Receptor Antagonists

A₁-adenosine receptor antagonists block the action of the A₁-adenosine receptors. Because the A₁-adenosine receptor plays an important role in causing the kidneys to retain sodium and fluids, blocking the action of this receptor may reduce the amount of fluid that the kidneys retain. In addition, clinical trials to date indicate that A₁-adenosine receptor antagonists may relieve fluid overload without an associated reduction in the filtration function of the kidneys.

Adentri Development Status

Biogen has conducted Phase I and Phase II studies of BG9928, a backup licensed compound, in both oral and intravenous formulations for the potential treatment of acute and chronic CHF.

In November 2003, at the annual meeting of the American Heart Association, Biogen announced that the results from a Phase II safety study of oral Adentri did not reveal any significant safety concerns during the 10 days of dosing or during an additional 30 days of follow up. The trial was a randomized, double blind, placebo-controlled study that evaluated the safety, pharmacology and clinical effects of oral Adentri among stable heart failure patients. Patients were maintained on their usual medications, including ACE inhibitors and diuretics, and were dosed with either placebo or one of four doses of Adentri, administered once daily for 10 days. In addition, the study showed increases in sodium excretion above baseline and above placebo beginning the first day of taking Adentri, and continuing over the 10-day dosing period. These effects were not accompanied by reductions in kidney function or substantial increases in potassium excretion.

Under the Adentri program to date, no licensed compound has been determined by the FDA or any other regulatory authorities to be safe or effective in humans for any use.

Preclinical Pipeline

Our research and development team is creating new product opportunities through our expertise in molecular cardiology. We have preclinical research programs in the areas of:

Adenosine Receptor Research

Adenosine is a naturally occurring small molecule that elicits pharmacological responses that tend to compensate for the imbalance in oxygen supply relative to demand that occurs when blood vessels are partially blocked by cardiovascular disease. We continue to explore the biology of adenosine through selective activation or inhibition of its four receptor subtypes, A₁, A_2A, A_2B and A₃. Our adenosine receptor research program has discovered proprietary compounds that selectively elicit the desired effects of adenosine receptor stimulation for the treatment of certain electrical conductance disturbances, such as atrial arrhythmias, and regulate the mechanisms of new blood vessel growth (angiogenesis).

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– Cardiac Conduction

Electrical impulses within the heart muscle play a key role in causing the heart muscle to sequentially expand and then contract, which is required for the heart to pump blood throughout the body in a controlled rhythm. Failure of this electrical system to function properly, such as in atrial arrhythmias, will result in a poorly pumping heart.

We have discovered and are now developing a series of novel, proprietary, orally bio-available partial A₁-adenosine receptor agonists, including CVT-3619, that selectively slow the electrical conductance in the heart to adjust the rate of an irregularly beating heart into the normal range. These compounds are similar to tecadenoson (which is being developed for the acute care of atrial arrhythmias), and are targeted for the continued care of patients with chronic atrial arrhythmias.

– Cardiopulmonary Disease

Our scientists together with external collaborators have led an effort to characterize the role of adenosine in the pathology of cardiopulmonary disease. We have participated in the discovery of the adenosine receptor responsible for the pro-inflammatory response that accompanies the asthmatic response, and have discovered small molecule inhibitors of this process. The goal of this program, which includes compounds such as CVT-6883, is to discover and develop novel approaches to the treatment of cardiopulmonary disease.

– Lipid Metabolism

High levels of plasma free fatty acid are often associated with high triglyceride levels, insulin resistance and diabetes, which are three important cardiovascular risk factors. Adenosine receptor stimulation in fat cells is known to decrease free fatty acids and the subsequent production of triglycerides. We have discovered compounds, such as CVT-3619, that positively regulate lipid metabolism to reduce these potentially harmful metabolic intermediates. The goal of the adenosine receptor research of lipid metabolism is to develop novel, orally bioavailable compounds that reduce free fatty acid and triglyceride levels and increase insulin sensitivity.

Cardiac Metabolism

In order for the heart to adequately pump blood, fuel (in the form of fatty acids and glucose) is metabolized with oxygen to yield ATP (a key molecule involved in the expenditure of cellular energy). When the heart muscle is weakened by disease such as CHF and therefore cannot adequately pump blood throughout the body, a compound that enhances cardiac metabolism could be beneficial. CVT-4325 is a member of a class of molecules that favorably affects cardiac metabolism to increase glucose oxidation as a result of its effects to reduce fatty acid oxidation. The increase in glucose oxidation is believed to enhance cardiac function without the concomitant increase in oxygen consumption because the heart gets more energy from the breakdown of glucose than fat. The goal of this program is to discover new products that may be effective in the acute and chronic treatment of CHF.

The goals of our cardiac metabolism program are to further characterize the therapeutic potential of ranolazine in the treatment of diseases other than chronic angina, and to discover new, proprietary products. For example, in a preclinical model of CHF, ranolazine increased work output by the heart without increasing the consumption of oxygen. In other words, cardiac performance and cardiac efficiency were improved. We have also discovered several novel, proprietary compounds under this program, including CVT-4325.

Atherosclerosis

The goal of our HDL drug discovery program is to study the ways in which the body removes excess cholesterol from the walls of blood vessels, in an effort to prevent or reverse the buildup of arterial plaques that cause heart attacks. Roughly half of heart attacks occur in patients with low levels of high density lipoproteins (HDL), known as the “good” form of cholesterol. Patients with the genetic disorder called Tangier disease have virtually no HDL in their blood, and are at a greatly increased risk for developing cardiovascular disease. Our scientists have used a new strategy combining gene expression microarrays and biochemical techniques to identify the gene that is defective in patients with Tangier disease. We have targeted this gene as part of a drug

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discovery program to identify novel, proprietary compounds that may increase reverse cholesterol transport and thus the amount of HDL in the blood.

Restenosis

The goal of our cell cycle inhibition program is to develop new therapeutics that suppress abnormal cellular proliferation that occurs during vascular damage associated with balloon angioplasty or stent implantation. Excessive proliferation of cardiovascular connective tissue cells or vascular smooth muscle cells causes the scarring and loss of function that is characteristic of chronic diseases of the heart, blood vessels and kidneys. As part of our drug discovery strategy, we have focused upon enzymes called cell cycle enzymes that regulate cellular growth and development. CVT-2584 is one of a series of novel compounds that selectively inhibit CDK2, a critical cell cycle enzyme. Preclinical studies with CVT-2584 have shown a substantial reduction of blockages after vascular injury.

Cardiovascular Genomics

Our cardiovascular genomics program is working to utilize the latest tools of genomics and gene expression microarray technology to identify novel gene and protein targets for drug discovery. We have focused on evaluating the expression of tens of thousands of human genes that are involved in the accumulation of lipids and progression of disease in the vascular wall. In this way, we are seeking to identify novel approaches to reduce the risk of heart attacks.

Collaborations and Licenses

We have established, and intend to continue to establish, strategic partnerships to potentially expedite the development and commercialization of our drug candidates. In addition, we have licensed, and intend to continue to license, chemical compounds from academic collaborators and other companies. Our key collaborations and licenses currently in effect include:

University of Florida Research Foundation

In June 1994, we entered into a license agreement with the University of Florida Research Foundation, Inc. under which we received exclusive worldwide rights to develop A₁-adenosine receptor antagonists and agonists for the detection, prevention and treatment of human and animal diseases. In consideration for the license, we paid an initial license fee and are obligated to pay royalties based on net sales of products that utilize the licensed technology. Under this agreement, we must exercise commercially reasonable efforts to develop and commercialize one or more products covered by the licensed technology. In the event we fail to reach certain milestones under the agreement, the licensor may convert the exclusive license into a non-exclusive license. In March 1997, we sublicensed our rights under this license that relate to A₁-adenosine receptor antagonists to Biogen (now Biogen Idec).

Syntex

In March 1996, we entered into a license agreement with Syntex (U.S.A.) Inc. to obtain United States and foreign patent rights to Ranexa for the treatment of angina and other cardiovascular indications. Syntex provided initial quantities of the compound for use in clinical trials and related development activities. The license agreement is exclusive and worldwide except for the following countries which Syntex has licensed exclusively to Kissei Pharmaceuticals, Ltd. of Japan: Japan, Korea, China, Taiwan, Hong Kong, the Philippines, Indonesia, Singapore, Thailand, Malaysia, Vietnam, Myanmar, Laos, Cambodia and Brunei.

Under our license agreement, we paid an initial license fee, and are obligated to make certain milestone payments to Syntex, upon receipt of the first and second product approvals for Ranexa in any of certain major market countries (consisting of France, Germany, Italy, the United States and the United Kingdom). Unless the

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agreement is terminated, in connection with the first such product approval, we will pay Syntex, on or before March 31, 2005, $7.0 million plus interest accrued thereon from May 1, 2002, until the date of payment. As of December 31, 2003, had we been required to accrue the $7.0 million milestone, we would have accrued approximately $1.8 million in interest expense. Unless the agreement is terminated, if the second product approval in one of the major market countries occurs before May 1, 2004, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest accrued thereon from the date of approval until the date of payment, and if the second such product approval occurs after May 1, 2004, but before March 31, 2006, we will pay Syntex, on or before March 31, 2006, $7.0 million plus interest accrued thereon from May 1, 2004, until the date of payment. Unless the agreement is terminated, if the second product approval in one of the major market countries has not occurred by March 31, 2006, we will pay Syntex $3.0 million on or before March 31, 2006, and if we receive the second product approval after March 31, 2006, we will pay Syntex $4.0 million within thirty (30) days after the date of such second product approval. No amounts have been accrued to date in relation to these milestones. In addition, we will make royalty payments based on net sales of products that utilize the licensed technology. We are required to use commercially reasonable efforts to develop and commercialize the product for angina.

We or Syntex may terminate the license agreement for material uncured breach, and we have the right to terminate the license agreement at any time on 120 days written notice if we decide not to continue to develop and commercialize Ranexa.

Biogen Idec

In March 1997, we entered into research collaboration and license agreements with Biogen (now Biogen Idec), which grant Biogen the exclusive worldwide right to develop and commercialize any products that are produced based on our A₁-adenosine receptor antagonist patents or technologies (including our rights under the University of Florida Research Foundation license) for all indications. Biogen’s efforts in this area are referred to as the Adentri program. In February 2000, based on results of a Phase II clinical trial, Biogen announced its intention to continue with the Adentri program, but with a backup licensed compound. Biogen owes certain milestone payments in connection with development and commercialization of licensed products, and is obligated to pay royalties on any sales of products covered by the agreements. Biogen has control and responsibility for conducting, funding and pursuing all aspects of the development, submissions for regulatory approvals, manufacture and commercialization of A₁-adenosine receptor antagonist products under the agreements.

Biogen may terminate the agreements for any reason upon 60 days written notice. If Biogen terminates the agreements, all rights to the technology we licensed to Biogen will revert to us. In addition, we will receive a non-exclusive license to certain technology of Biogen, and we will owe Biogen a royalty on future sales of any A₁-adenosine receptor antagonist products under the agreements.

Fujisawa Healthcare

In July 2000, we entered into a collaboration with Fujisawa Healthcare, Inc. to develop and market second generation pharmacologic cardiac stress agents. Under this agreement, Fujisawa received exclusive North American rights to regadenoson, a short acting selective A_2A-adenosine receptor agonist, and to a backup compound. We received $10.0 million from Fujisawa consisting of a $6.0 million up-front payment, which is being recognized as revenue over the expected term of the agreement, and $4.0 million for the sale of 54,270 shares of our common stock. In September 2001, based on initiating a Phase II clinical trial for regadenoson, Fujisawa paid us a $2.0 million milestone payment. In November 2003, based on initiating a Phase III trial of regadenoson in October 2003, Fujisawa paid us a $3.0 million milestone payment. We may receive up to an additional $19.0 million in cash based on other development and regulatory milestones such as certain regulatory filings and approval. In addition, Fujisawa reimburses us for 75% of the development costs, and if the product is approved by the FDA, we will receive a royalty based on product sales of regadenoson and may receive a royalty on another product sold by Fujisawa.

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Fujisawa may terminate the agreement for any reason on 90 days written notice, and we may terminate the agreement if Fujisawa fails to launch a product within a specified period after marketing approval. In addition, we or Fujisawa may terminate the agreement in the event of material uncured breach, or bankruptcy or insolvency.

Marketing and Sales

We currently have contracted with a third party for distribution capability and have only limited sales and marketing capabilities. With the 2003 amendment to our sales and marketing services agreement with Quintiles and Innovex, we will now market Ranexa, if approved, in the United States. In order to do this, we will have to develop our own marketing and sales force with technical expertise and with supporting distribution capability. We have hired a limited number of marketing and sales personnel, and would expect to hire additional personnel in connection with the launch of our first product. In addition, we may promote our products in collaboration with marketing partners or rely on relationships with one or more companies with established distribution systems and direct sales forces. For example, Fujisawa has agreed to market and sell regadenoson in North America, if